Harvard Business School professor Mikolaj Jan Piskorski analyzed users of Facebook, Twitter and My Space and came to this conclusion: “People just love to look at pictures. That’s the killer app of all online social networks. Seventy percent of all actions are related to viewing pictures or viewing other people’s profiles.”

Pictures of women, mostly. His data suggest that two-thirds of picture views are pictures of women — men looking at women they hardly know (and some women they know well), and women looking at other women they know well. More at Business Insider.

“A glance at the financials — shrinking revenue, losses, declining market share, loss of mojo and market leadership — would suggest that the company might be worth 1X-2X revenue — on the assumption that MySpace could cut costs radically and make a bit of money in the next few years. That would put the valuation at about $500 million to $1.2 billion — with the lower end being LESS than Rupert paid for it, and the upper end being twice what he paid for it (hardly the steal of the century)….

“In May, Facebook’s unique visitor count caught up to MySpace, then surpassed it by a small margin. By June, Facebook hit 77 million unique visitors, representing a significant rise from May’s 70.28 million uniques — and leaving MySpace’s 68.4 million uniques in the dust, according to comScore.

“Meanwhile, MySpace lost almost four million unique visitors in June, adding to the 700,000 uniques it lost in May. As Facebook expands in the US and internationally, MySpace’s star appears to be steadily declining.”

“In other words, the war is over. MySpace user number growth has stalled out, and historically speaking, no company of note has reversed such a trend. But MySpace may have a much bigger problem on its hands than losing the social networking war to Facebook. Their real problem is that page views are declining sharply. That means people are still visiting the site, just far less than they used to. That means less advertising impressions in a time that MySpace can hardly be expected to deal with it.”

“MySpace’s ’09 revenue was pegged at $630 million; now eMarketer believes it will only hit $495 million — a full 15% decline from 2008.

“In contrast, Facebook ad revenue for the US alone should rise by 9.5%, to $230 million. And spending across other socnets will likely rise by 1.5% to $345 million — a small figure, given that advertising across social networking widgets demonstrated clear growth so far this year.”

“By the standards marketers sometimes use to measure digital-ad effectiveness, the MySpace effort wasn’t overwhelming. Of 76.9 million people exposed to the campaign in four months, as estimated by ComScore, only 765,000, or fewer than 1%, visited an advertiser page on MySpace, though roughly half who did (358,000) visited the advertiser’s website.

“But by the measure that matters most, sales, the campaign appeared to pay off nicely. It produced $1.28 million in offline sales, as measured by Dunnhumby, which compared purchases among shoppers not exposed to the campaign with purchases among those who were. That amounted to a 28% return on investment.”

“On a conference call last month, Peter Chernin, president and chief operating officer for the News Corporation, toned down the grandiose expectations for social networking advertising and acknowledged that selling spots on personal profile and group pages is not easy.

“Social networking represents an ‘entirely new form of Internet activity,’ Mr. Chernin said.

“When MySpace’s parent, Fox Interactive Media, announced a three-year, $900 million advertising pact with Google in 2006, analysts started placing big bets that social networking would be a major new revenue stream. While the Web is becoming more social, it is hard to wring profits from it.

“Indeed, the balloon of unrealistic prospects is losing air. The attitude change was first detected at the end of January when, one year into its $900 million pact with MySpace, Google said that social networking inventory was not earning money as well as expected. (More recently, Google said the situation was improving.)”